Italy: Right populist coalition government collapses

After just 14 months in power, the populist coalition government of the far-right Lega and Five Star Movement (M5S) in Italy has collapsed. Matteo Salvini, Lega leader and interior minister, pulled the plug by demanding a vote of no confidence in the government led by the ‘non party’ prime minister Giuseppe Conte. Conte has now resigned, opening up the possibility of another period of political and economic instability whose repercussions could spread beyond Italy to the European Union itself.

The coalition was riven with contradictions from day one. With the two establishment capitalist parties, Forza Italia (FI, Silvio Berlusconi’s party) and the Democratic Party (PD, formerly led by Matteo Renzi) trounced in the 2018 general election, the populist parties won nearly 50% of the vote. Following weeks of negotiations the unthinkable happened and the M5S, the then dominant force electorally (32%), embraced the Lega (17%) in an opportunist alliance aimed at assuming power, at whatever cost. And the cost for the M5S has been very heavy, seeing its vote almost halve while the Lega has more than doubled its support, completely reversing the balance of forces within the coalition.

In the ‘honeymoon’ phase the two parties were able to paper over the cracks, with the M5S mainly going along with Salvini’s hard-line policies on immigration, ‘law and order’ and ‘sovereignism’ (nationalism) which dominated the government’s agenda. But while media-savvy Salvini was able to use those issues as a springboard to extend the Lega’s support beyond its traditional base amongst small businesses in the North, mainly at the expense of FI, the M5S was seen to be reneging on its electoral promises. This is especially regarding its opposition to environmentally damaging infrastructure projects like the TAP gas pipeline in the South.

The M5S managed to pass its flagship policy of the ‘citizen’s income’, on the promise of which it had swept to victory in many constituencies in the South during the general election. But although the payment will make some difference to the very poorest, it has become nothing more than a time-limited, conditional unemployment benefit set at subsistence level. While it might be enough to retain some votes in the South, M5S support is haemorrhaging even there.

Cracks grow wider

As the months went on, the cracks between the coalition partners became ever wider with serious differences emerging over differentiated regional autonomy (which would benefit the interests of the capitalists and politicians in the North at the expense of the poorer regions of the South), the planned TAV high speed rail link between Turin and Lyon (opposed by the M5S but supported by the Lega) and many other issues. It was against this backdrop and his crushing victory in the European elections that Salvini, together with his business backers, decided to move to capitalise on the Lega’s high support in the polls and to ditch his unreliable allies in the M5S.

The M5S is by no means an anti-capitalist party but it has no clear class base. Aiming to bridge the divide between ‘left and right’, ‘workers and employers’, it is a very unstable political force. For small and big business, M5S support for limited ‘welfarism’ was seen to be diverting public money away from business friendly policies, such as tax cuts. And their opposition to big infrastructure projects an obstacle to profit making. In a situation where Berlusconi’s party has been cannibalised by the Lega, and the PD is paralysed and languishing at or below 20% in the polls, even sections of big business have given conditional support to Salvini, albeit suspicious of his anti-Europe rhetoric. In reality, in the two ‘showdowns’ with the EU over the budget defecit and debt levels, both sides ended up making concessions and their hope is that another compromise will be possible this autumn when the next budget is due to be agreed.

In calling for no-confidence in the government Salvini, in language reminiscent of Hitler and Mussolini, demanded ‘full powers’ for himself. Salvini is not a fascist, although he has been friendly to neo-fascist parties and is likely to ally himself with the Fratelli d’Italia party of Georgia Meloni, which has neo-fascist origins. But he has promoted authoritarian policies, especially with regards to repressive measures against public protests and immigrants. Part of his appeal has been his persona as the ‘strong man’ who gets things done. This stance has even gained support from people who don not necessarily support his policies but admire the fact that he appears to do what he says he will do, unlike previous politicians (and now the M5S).

At the time of writing, it is not clear what will happen next. It is up to the President to decide whether to call elections or whether to look instead towards cobbling together a different government. Economic crisis and a dysfunctional political system have pushed sections of the Italian ruling class on several occasions to resort to unelected ‘technocratic’ governments, or to use the President as a lever to force through their interests. For example, as they did when the current president, Sergio Mattarella, vetoed the Lega-M5S candidate for finance minister, economist Paolo Savona, because he was perceived as being too anti-European.

What does Salvini want?

Neither is it totally clear what Salvini himself wants. He seemed to backtrack on his declaration that he could no longer work with the M5S, demagogically offering a ‘bribe’ of 50bn euros in investment and tax cuts, but its leader Luigi Di Maio has ruled out patching up the coalition with Salvini, ‘the traitor’. Some commentators have speculated that Salvini would prefer to be temporarily in opposition to avoid the hot potato of passing a cuts budget in the autumn to avoid automatic increases in VAT.

Salvini certainly does not have complete control of the process, as was shown when the M5S and the PD combined in the Senate to inflict Salvini’s first defeat by thwarting an immediate no confidence vote. Could that alliance be extended to forming a government? They have the parliamentary numbers but there are many obstacles to this option. Ex PD leader and ex-prime minister, Renzi, who has been preparing for a possible right split from the PD and the formation of a Macron-style bourgeois liberal party, has proposed himself to lead a PD-M5S government. But Renzi is so politically toxic that that it would most likely be a step too far for Di Maio, however desperately the M5S want to cling to power.

The current leader of the PD, Nicola Zingharetti, has for some time opposed a coalition with the M5S but appears to be softening under pressure. Echoing the tired old bankrupt slogans of the past, Liberi e Uguali (LEU – what is left of the parliamentary ‘Left’, on a mere 2% in the polls) has said it would support such a government to “stop Salvini”, just as in previous guises it went into coalition with the PD to “stop Berlusconi”, but, in fact, paved the way for his election. The extra-parliamentary PRC (Party of Comunist Refoundation), now virtually politically irrelevant, has said it is prepared to do the same. If such a coalition were to take shape, however, with the so-called anti-establishment M5S in bed with the discredited establishment PD, that would be a gift to Salvini who would probably see an even bigger surge in his support in opposition.

If an election is called Salvini could decide that the Lega will fight to win a majority alone but that would be a risky step. More likely he would ally himself with Fratelli d’Italia, which on current polling could net him a majority, or even extend that to Forza Italia just to be sure. Whatever the permutations, a right-wing government, with Salvini as prime minister, is the most likely outcome of an early election. But given the weakness of Italian capitalism, such a government could be the spark that unleashes the mass social and industrial unrest which, despite accumulating anger and frustration, has been on hold for some time now.

Eleven years after the world financial crisis, Italy has been though three recessions. The economy is now virtually stagnant and the OECD is predicting another recession this year. With consumer spending flat, the Italian economy is reliant on exports in an increasingly fragile world economic scenario. Total public debt is around 130% of GDP, which means that even a modest increase on debt interest (spreads) risks a serious economic crisis and draconian attacks on public services and the jobs and income of working-class and sections of middle-class people. In a situation where real wages are still below their pre-crisis level, per capita income is less than it was in 1999 and over 30% of young people are without a job, these are explosive ingredients. These could combine to provoke mass struggle, despite the role of the trade union leaders and the absence of any real political alternative for working people and youth. In fact, it will be only on the basis of struggle that such an alternative can be built.